Pricing is one of the most challenging parts of running a bookkeeping business. Getting it right can make the difference between steady income and financial stress. Although many bookkeepers charge by the hour, there are other factors to think about when setting prices.

This article looks at how to set prices that reflect the value of your services, attract clients and keep your business profitable. We’ll also discuss how FigsFlow, a software for accounting professionals, can make the pricing process easier and more efficient.

Understanding the Bookkeeping Service Market

The first step in defining pricing is understanding the market you’re operating in. The scope of bookkeeping services can range from simple data entry to complex financial reporting, tax preparation and advisory services.

Each service comes with a different level of expertise, time commitment, and value, all of which need to be factored into pricing. Key factors influencing pricing include:

• Complexity of the service – Basic bookkeeping tasks like reconciling bank statements usually cost less than more complex jobs like preparing tax filings or handling payroll.
• Client’s business size – Larger businesses usually need more detailed financial management, which costs more.
• Geographical location – Bookkeeping fees can vary depending on the local economy and cost of living.

Pricing Models: Hourly vs. Fixed Rates

Bookkeepers use two main pricing models: hourly and fixed-rate. Each has pros and cons, and the choice depends on the services offered and what the bookkeeper and client prefer.

1. Hourly Rate – With this model, you charge clients based on the time spent on their work. It works well for clients who need occasional help or tasks that aren’t predictable, like a one-time project.

• Pros – It’s flexible because you only charge for the time you actually spend working.
• Cons – It’s hard to predict costs upfront, and clients might not like the uncertainty of the final bill.

2. Fixed Rate – This model charges a set price for certain services like monthly bookkeeping or payroll management. It works well for regular services where the workload is predictable.

• Pros – The bookkeeper and client know the cost in advance, making budgeting easier.
• Cons – The bookkeeper takes the risk, especially if the work ends up taking more time than expected.

3. Value-Based Pricing – This pricing is based on the value the services bring to the client’s business. The price can reflect those benefits if the bookkeeper helps the client save money or grow their business. For example, a bookkeeper who helps minimise taxes or maximise cash flow may charge based on the money saved.

• Pros – It can mean higher earnings if the services greatly impact the client’s business.
• Cons – It requires a strong understanding of the client’s business and the ability to measure the value of the services provided.

How Bookkeepers Can Use FigsFlow for Pricing Efficiency

Bookkeeping pricing strategies should reflect the services offered and match industry standards and client expectations. This is where tools like FigsFlow can be of real help to bookkeepers. FigsFlow provides a variety of pre-built templates that simplify managing pricing, contracts and proposals while making sure everything stays in line with industry norms.

Here’s how FigsFlow can help bookkeepers set their prices:

• Customisable Pricing Schedules – FigsFlow allows bookkeepers to create pricing schedules that fit their services. Whether you charge hourly, by project, or based on value, FigsFlow helps you set clear rates that are easy to share with clients.
• Engagement Letters and Proposals – The software also has templates for engagement letters and proposals. This makes it easy to quickly create professional documents that outline your pricing, scope of work and payment terms, helping clients know exactly what to expect before the work starts.
• Transparency with Clients – FigsFlow’s pre-built templates make pricing details clear and upfront. This reduces confusion and helps build trust with clients from the beginning. By clearly outlining the services and fees, you can avoid any misunderstandings down the line.
• Efficiency and Time-Saving – FigsFlow automates repetitive tasks like creating pricing schedules and proposals, saving bookkeepers valuable time. This allows them to focus on growing their business or offering more valuable services to clients.
• Tracking and Reporting – FigsFlow also helps bookkeepers track time and monitor how much time is spent on each task. This data can help fine-tune pricing strategies over time, adjusting based on actual work hours and client needs.

Key Considerations for Setting Prices

• Competitive Analysis – Bookkeepers need to understand the local market and how competitors price their services to stay ahead. But just matching prices isn’t enough. Bookkeepers should aim to provide more value.
• Client Retention – When setting prices, think about keeping clients for the long haul. Offering flexible pricing that scales with the growth of your clients’ businesses can help build lasting relationships.
• Cost of Doing Business – Remember to account for the costs of running your bookkeeping business, such as software subscriptions, employee salaries, insurance, and marketing. Your pricing should cover those expenses to keep your business profitable.

Conclusion

Setting the right prices for bookkeeping services is key to staying profitable and fostering good client relationships. Whether using hourly, fixed, or value-based pricing, it’s important to consider the services’ complexity, what the client needs and the local market.

Tools like FigsFlow can simplify pricing, allowing bookkeepers to create clear, professional proposals and monitor pricing effectiveness.